mos mosaic feb 2010 presentation

8/14/2019 MOS Mosaic Feb 2010 Presentation

1/22

Morgan StanleyGlobal Basic Materials Conference

Larry Stranghoener, Executive Vice President and Chief Financial Officer

February 25, 2010


2/22

Slide 2

Safe Harbor Statement

This presentation contains forward-looking statements within the meaning of the Private

Securities Litigation Reform Act of 1995. Such statements include, but are not limited to,statements about future financial and operating results. Such statements are based upon thecurrent beliefs and expectations of The Mosaic Companys management and are subject tosignificant risks and uncertainties. These risks and uncertainties include but are not limited tothe predictability and volatility of, and customer expectations about, agriculture, fertilizer, rawmaterial, energy and transportation markets that are subject to competitive and otherpressures and the effects of the current economic and financial turmoil; the level ofinventories in the distribution channels for crop nutrients; changes in foreign currency and

exchange rates; international trade risks; changes in government policy; changes inenvironmental and other governmental regulation, including greenhouse gas regulation;difficulties or delays in receiving, or increased costs of, necessary governmental permits orapprovals; the effectiveness of our processes for managing our strategic priorities; adverseweather conditions affecting operations in Central Florida or the Gulf Coast of the UnitedStates, including potential hurricanes or excess rainfall; actual costs of asset retirement,environmental remediation, reclamation or other environmental regulation differing frommanagements current estimates; accidents and other disruptions involving Mosaicsoperations, including brine inflows at its Esterhazy, Saskatchewan potash mine and otherpotential mine fires, floods, explosions, seismic events or releases of hazardous or volatilechemicals, as well as other risks and uncertainties reported from time to time in The MosaicCompanys reports filed with the Securities and Exchange Commission. Actual results may

differ from those set forth in the forward-looking statements.


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Slide 3

Strategic Focus

Deliver value for shareholders

Focus on Potash and Phosphate

Grow Potash Strengthen Phosphate

Maintain a strong balance sheet


4/22


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Slide 5

Rebounding Potash Demand

World MOP Demand

0

10

20

30

40

50

60

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09F

Mil Tonnes

Source: Mosaic

10F

Low & High

Range


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Slide 6

Growth Opportunities - Our Potash Expansions

Note: The projected annual capacity includes approximately 1.3 million tonnes that we currently produce under a third party tolling agreementat our Esterhazy, Saskatchewan potash mine that will revert to us when the tolling agreement expires.


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Slide 7

Expansions Improve Mosaics Cost Structure

0 10 20 30 40 50 60

US$

pertonne

Mil tonnes

Industry Cost CurveMOP delivered US cornbel t weighted average cost as of June 30, 2009*

* Excludes Canadian resource taxes and royalties for all Canadian potash producers

Source: Mosaic

Mosaic Average


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Slide 8

Worlds Largest Integrated Phosphate Producer

Worlds largest capacity offinished phosphate fertilizer

Mosaic phosphate productionshare

14% Globally

59% U.S.

World scale & efficientoperations

World capacity approximates 76million tonnes (DAP/MAP/TSP)

0 3 6 9 12

Mosaic

YTH

OCP

PhosAgro

CF

Phosphate Fertilizer Capacity

Mil tonnes

Source: Fertecon / Mosaic


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Slide 9

Phosphate Demand Recovery

World Processed Phosphate Demand

0

10

20

30

40

50

60

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09F

Mil Tonnes

Source: Mosaic

DAP, MAP and TSP

10F

Low & High

Range


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Slide 10

Industry Leading Cost Structure in Phosphate

0 5 10 15 20 25 30

US$

pertonne

Mil tonnes

Industry Cost CurveDAP FOB plant/port weighted average cost as of June 30, 2009

Mosaic Average

Source:Mosaic


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Slide 11

Phosphates Opportunities

Operational Cost Savings Maintenance

Contract services

Process chemicals

Energy heat recovery and

conversion

Phosphate Rock and OtherStrategic Opportunities


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Slide 12

Distribution Assets Aligned with Global Demand


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Strong Financial Position

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

$i

n

billion

s

Cash and Cash Equivalents Less Debt *

* See appendix for reconciliation of Cash and Cash Equivalents


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Business Outlook


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Slide 15

Growing Global Affluence + Fuel

3%

5%

7%

9%

11%

13%

2000 2002 2004 2006 2008 2010F 2012F

Source: IHS Global Insight

GDP GrowthThree largest Asian countries by population

China India Indonesia

200

220

240

260

280

1990 1992 1994 1996 1998 2000 2002 2004 2006

Hectares per1,000 People

World Arable Land per Person

Source: FAO and IHS Global


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Slide 16

Growing Grain & Oilseed Use

World Grain and Oilseed Production and Use

2.0

2.1

2.2

2.3

2.4

2.5

2.6

2.7

2.8

99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11

L

10/11

M

10/11

H

Bil Tonnes

Production Use

Source : USDA and Mos aic

2010/11 Scenario Assumptio ns

Low Medium High

Harvested Area Change -0.5% -0.5% -0.5%

Yield Deviation from 11-Year Trend Largest Negative 0 Largest Positve

Demand Growth 1.5% 2.0% 2.5%


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Slide 17

More Cushion but Stocks Still Not at Secure Levels

World Grain and Oilseed Stocks

250

300

350

400

450

500

550

600

650

99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11L

10/11M

10/11H

Mil Tonnes

40

50

60

70

80

90

100

110

120

Days o f Use

Stocks Days of Use

Source : USDA and M os aic

2010/11 Scena rio Assump tion s

Low Medium High

Harvested Area Change -0.5% -0.5% -0.5%

Yield Deviation from 11-Year Trend Largest Negative 0 Largest Positve

Demand Growth 1.5% 2.0% 2.5%


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Slide 18

Farm Economics

Key assumption s

ISU application rate recommendations

2009 and 2010 crops sold at CBOT closing prices on February 19, 2010 lessbasis

Fertilizer prices for 2003 - 2009 are from USDA. 2010 fertilizer prices are basedon current spot wholesale prices

$0

$100

$200

$300

$400

$500

$600

$700

2005 2006 2007 2008 2009F 2010F

$ Acre

Source: Iowa State University and Mosaic

Return After Variable Costfor a U.S. Midwest High Yield Farm Operation

Soybeans Corn Follow ing Soybeans Corn Follow ing Corn

05

10

15

20

25

30

35

4045

2003 2004 2005 2006 2007 2008 2009 2010

Bu Corn

Sources: Iowa State Universit y, USDA and Mosaic

Crop Nutrient Costs on Corn in IowaBush els of Corn Per Acre


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Slide 19

Growth Expected to Resume

World Nutrient Use

110

120

130

140

150

160

170

180

190

95 96 97 98 99 00 01 02 03 04 05 06 07 08E 09F 10F

Source: IFA November 2009

Mil Tonnes

2007/08 2008/09E 2009/10F 2010/11F

Nitrogen 3.2% -1.5% 1.6% 2.6%

Phosphate 0.1% -10.5% 3.0% 6.2%

Potash 6.8% -19.8% -4.5% 13.5%

Total 3.1% -6.7% 1.0% 4.9%

Changes in World Fertilizer Consumption


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Slide 20

Key Takeaways

Focus on value creation

Global leader with vertically integratedoperations

Potash growth projects at attractivecapital costs

Phosphate growth options in rockreserves and acquisitions

Encouraging recent market trends


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Thank you!


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Slide 22

Appendix: Cash and Cash Equivalents Less Debt Reconciliation

$ in billions

Period Ended

Cash and Cash

Equivalents

Short-Term

Debt

Current

Maturities

Long-Term

Debt Total Debt

Net (Debt)

Cash

August 31, 2007 $ 0.60 $ 0.20 $ 0.50 $ 1.60 $ 2.20 $ (1.60)

November 30, 2007 0.60 0.10 0.20 1.40 1.70 (1.00)

February 29, 2008 1.10 0.20 - 1.40 1.70 (0.50)

May 31, 2008 2.00 0.10 - 1.40 1.60 0.40

August 31, 2008 2.20 0.10 0.10 1.30 1.50 0.70

November 30, 2008 2.80 0.10 - 1.30 1.40 1.40

February 28, 2009 2.50 0.10 - 1.30 1.40 1.10

May 31, 2009 2.70 0.10 - 1.30 1.40 1.30

August 31, 2009 2.60 0.10 - 1.30 1.40 1.20

November 30, 2009 2.60 0.10 - 1.30 1.40 1.20

Source: Cash and cash equivalents from 10Q/10K as filed. Total debt includes Short term debt, Currentmaturities of long-term debt, Long-term debt less current maturities, Long-term debt due to Cargill Inc andaffiliates.

mos mosaic feb 2010 presentation

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